Canada’s Endeavour Silver (TSX: EDR) (NYSE: EXK) took a significant hit to production in the three months to the end of June, as operations were halted for two months to comply with the Mexican government’s efforts to halt the spread of the coronavirus pandemic.
During the quarter, the Vancouver-based precious metal miner churned out 596,545 ounces of silver and 5,817 gold ounces, for silver equivalent production of 1.06 million ounces.
Production fell at the three silver-gold mines Endeavour has in Mexico: Guanaceví, Bolañitos and El Compás.
The figures represent an output drop of 42% when compared to the 1.1 million ounces of silver and 9,558 gold ounces, or 1.82 million of silver equivalent ounces, Endeavour produced in the same period last year.
Production fell at the three silver-gold mines Endeavour has in Mexico: Guanaceví mine in the Durango state, Bolañitos mine in Guanajuato and El Compás mine in the state of Zacatecas. The suspension of El Cubo mine, in November last year, as it run out of ore.
“Ignoring El Cubo, Q2, 2020 production, pro-rated for the number of operating days, increased significantly due to the improved plant throughput and ore grades at Guanaceví,” the miner said.
Endeavour was able to resume operations in late May, as Mexico deemed mining to be an essential activity.
“During the mine suspension period, we sent our employees home on full salary while keeping essential personnel working at each mine site to maintain safety, security and equipment,” chief executive Bradford Cooke, said in the statement. “After the mines restarted, we were able to outperform our adjusted mine plans in June.”
Hardest hit metal
Silver was the commodity hardest hit by mine closures mandated by governments to stop the spread of the coronavirus.
Prices for the precious metal, however, are forecast to surpass the $21 per-ounce-mark later this year. The gold:silver ratio – the quantity of silver ounces needed to buy an ounce of gold – is expected to drop below 90, The Silver Institute said on Thursday.
Silver prices averaged $16.65 an ounce in the first half of the year, reaching $17.84 per ounce at the end of June. It has since broken through the $18 per ounce barrier.
Mexico, the world’s top producer of the metal, is facing in 2020 one of the deepest recessions in its history as an already weak economy can barely cope with the impact of the coronavirus outbreak.
The country’s economy is forecast to contract 6.7% this year, deeper than during the devastating Tequila Crisis of the mid-1990s, the latest Citibanamex analysts survey shows.
Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million ounces last year, up from 196.6 million ounces in 2018.
It also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.